Filing for business-turnaround ADR and shrinking plants worldwide on the strength of a ¥56bn waiver (2019)

What the number of plants shows

Business-turnaround ADR is a framework for adjusting debt with the lending banks alone, outside the courts, and its merit is that trade with suppliers and customers need not stop. Akebono says that through the roughly eight months from filing to completion its relations with domestic customers did not change materially. What financial support improves, however, is the balance sheet, not the income statement. The $513.7M (¥56bn) of debt forgiveness produced net profit of $233.2M (¥25bn) for the year to March 2020, but operating profit that year was only $34.7M (¥4bn), and sales the following year shrank to $1.2B (¥134bn).

The count of plants states plainly what these five years were. The United States, taken to four sites by the two plants acquired from Bosch in 2009, went back to two when those two closed in 2020, and the Elizabethtown plant built for the GM joint venture closes in December 2025. What remains is the single friction-material plant opened at Glasgow in 1994: fifteen years to expand, five to contract. The ¥15bn of operating profit Akebono targets for fiscal 2030 amounts to recovering, from a narrowed base, the level it earned in the year to March 2008 by adding sites.